Appellate authority rules in favor of appellant for GST rate on turbine generator set

The appellate authority condoned the 13-day delay in filing the appeal, ruling in favor of the appellant in the classification of the turbine generator set for waste-to-energy projects under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate), subject to a 5% GST rate. The authority held that the turbine generator set qualifies for the concessional rate as an integral part of waste-to-energy plants, overturning the AAR's decision. The appeal was disposed of in favor of the appellant.

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Issues Involved:
1. Condonation of delay in filing the appeal.
2. Classification of Turbine Generator Set under GST.
3. Applicability of 5% GST rate under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate) dated 28.06.2017.

Condonation of Delay:
The appellant sought condonation for a 13-day delay in filing the appeal, attributing it to non-receipt of necessary information and awaiting clarification from the CBIC. The appellate authority condoned the delay, finding the explanation satisfactory.

Classification of Turbine Generator Set:
The appellant manufactures and supplies steam turbines and sought a ruling on whether their turbine generator set for waste-to-energy projects qualifies under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate), attracting a 5% GST rate. The appellant argued that the turbine generator set falls under Chapter 84 of the Customs Tariff Act, 1975, and should be considered a part of waste-to-energy plants/devices.

Applicability of 5% GST Rate:
The appellant contended that their turbine generator set is integral to waste-to-energy plants, which convert municipal solid waste into electricity. They cited previous rulings where similar equipment used in waste-to-energy projects was granted the 5% GST rate. The appellant also referenced Circular No. 80/54/2018-GST, which clarifies that machinery used in the initial setup of renewable energy plants, including waste-to-energy plants, qualifies for the concessional rate.

Discussion and Findings:
The appellate authority examined the records and submissions, emphasizing that the turbine generator set is a crucial component in converting waste to energy. The authority disagreed with the AAR's interpretation that only devices directly converting waste to energy qualify for the 5% rate. The turbine generator set, being part of the waste-to-energy plant, falls under the description in Sl. No. 234 of Schedule I of Notification No. 01/2017.

The authority also confirmed that the turbine generator set, classified under Chapter 84 of the Customs Tariff Act, 1975, meets the criteria for the concessional GST rate. The CBIC Circular No. 80/54/2018-GST supports this interpretation, stating that machinery used in setting up renewable energy plants, including waste-to-energy plants, qualifies for the 5% rate.

Conclusion:
The appellate authority set aside the AAR's ruling and held that the turbine generator set supplied by the appellant for use in waste-to-energy projects is covered under Sl. No. 234 of Schedule I of Notification No. 01/2017-Integrated Tax (Rate), attracting a 5% GST levy. The appeal was disposed of accordingly.

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